Ok, I know this will be a bit of a read, but:

Capitalism vs Croney Capitalism

In an ideal scenario, a “free market” is a market that may be regulated but not in such a way that the state uses its institutional powers to play favourites.

Either a good or service can be provided on the market, which means that within the limits of the law any group or individual can provide that service, or the service is banned, meaning it won’t be allowed for anyone to provide.

Depending on who you ask, even simple barriers such as licenses to operate and OSHA guidelines are forms of interference with the free market; the reality is that in practice perfect information does not exist and society at large prefers limiting the ability of the incompetent to do harm accidentally or through negligence, rather than having them punished after the fact.

Croney capitalism is when these barriers are not only present but erected (typically by the government, but it could also be done by other regulatory bodies) in such a way that they deliberately privilege certain preferred entities (the aforementioned cronies) over others.

This, much like redlining was discriminatory to black people despite mentioning them explicitly, does not have to be an explicit bias, it can be as simple as tuning requirements to make them prohibitive to companies not already established in the market to prevent new competition from coming into existence.

The US definitely has a big issue with this at multiple scales.

What is the best solution

I find the best approach to markets is to look at their elasticity.

An example of a highly elastic market could be videogames. Nobody needs videogames to survive, nobody needs a specific videogame to exist, it’s entirely driven by preference and unnecessary voluntary spending, you have full access to the entire market regardless of where you are provided you can pay the price of admission.

Perfect field to build a market around, the client will naturally gravitate to whatever offer they find provides the best value for money, companies will read the signals and adapt, etc.

A highly inelastic market is, for instance, emergency healthcare. Whenever you are in the market for it, you definitionally have an urgent, time sensitive, geographically limited need for the product. You can’t shop around beyond that range and failure to find the product usually means permanent consequences potentially as severe as death.

In that case, a market is a terrible solution to the problem, as markets have no incentive to capillarise at a loss, and want to price their goods and services based on the value to the client, which in this case would be infinite.

A market handling healthcare without a non-profit option competing with it is a recipe for disaster, while flanked by one it becomes extremely beneficial.

Italy and France, 2 of the best healthcare systems in the world in terms of cost per capita and outcomes, are mixed systems where you can go to the state healthcare system for anything and pay a nominal amount (to deter timewasters) or you can get private insurance or pay out of pocket for private alternatives that have to follow the same standards as the public sector at minimum. This helps treating niche conditions or skipping the line on severe common conditions, meaning those who can afford private treatment will lessen the load on the public sector, reducing queues for those who can’t afford it.

In short: The best approach is looking at each market category and making tailored solutions that best fit the kind of good/service being dealt with.

Some markets, like security, are better left in the hands of a few strictly regulated entities, other are better served by a fully free approach (like luxury goods), most important things fall somewhere in the middle, where some state interference/mediation objectively leads to the best outcomes.